From a meeting sponsored by the Alliance for Health Reform, “Public Plan Option: Fair Competition or Recipe for a Crowd-Out?” in Washington, D.C.:

Who remembers ‘Celebrity Deathmatch’ on MTV? It’s a cultural touchstone. I think everyone currently debating health reform here on the Hill should be familiar with it (Wikipedia says they’re reviving it). And if these fools can’t figure this out in 2009, we should hold one. Set up a ring right on the South Lawn on the White House.

The main crux of supporters’ arguments was that a public plan offers too much to ignore. Karen Davis, Ph.D., president of the Commonwealth Fund, cited data from her organization forecasting that with the enactment of a public plan, $3 trillion could be saved between 2010-2020. That’s mostly from administrative savings.

Opponents to a public plan don’t necessarily refute these figures. According to Stuart Butler, PhD, of the Heritage Foundation, the savings with a public plan are obvious. But its precisely these savings that will make the plan unstoppable, driving other payers who can’t compete out of business. Further, this prospect threatens to compromise bipartisan (and public) support for any reform at all, and derail the whole effort before it has really even begun, he said.

My blood lust aside, we’re at a stalemate. And maybe we need to just put this issue aside for a minute and fight about something else. As Karen Ignagni, of AHIP, pointed out, this incessant harping on this one issue of whether or not there SHOULD be a public plan is overshadowing discussion of the possible details contained in such a plan, and details about the rest of the health reform effort. Keep dancing, folks. We’ve got a few more rounds to go.

2 responses to “Public Plan Death Match”

Real Healthcare Reform: Changing the Incentives and the Rules of the Game; Creating an Electronic Health Record for Every Citizen Who Wants One.

If you have the financial resources of Bill Gates or Warren Buffett you needn’t pay money to a health plan each month, since if you get sick or injured – even very seriously – you have more than enough money to pay all your medical bills yourself.
But those of us with significantly less financial resources must find some other means of dealing with the thousands or even hundreds of thousands of dollars or more of medical expenses that we might incur should a serious illness or injury be our fate.
Enter the concept of “health insurance”.
Large numbers of individuals and/or their employers pay some money each month into one or another big pot called a “health plan”. Those individuals who remain essentially very healthy for many years and then suddenly die or perhaps leave a particular health plan for some other reason – if they have put more money into the pot than was taken out to pay all their medical expenses – wind up helping to pay the medical bills of those members of the health plan who become seriously ill or injured and incur a lot of medical expenses.
Many members of health plans don’t seem to fully understand – or perhaps choose to forget – that if they become seriously ill or injured, for the most part their medical bills will be paid by the members of their health plan who have remained healthy. Some Americans believe that healthcare should become a “right” of every American citizen. If a nationalized single payer health plan were enacted, every American citizen – who for whatever reason became ill or injured and incurred significant medical expenses – would for the most part have his or her medical bills paid by all U.S. taxpayers.
For any health plan to work which has a large number of people pooling their money to essentially pay the medical bills of whichever members of the plan become seriously ill or injured, rules must be established as to when and how much money may be taken out of the pot e.g. “legitimate” doctor bills and hospital bills. Equally important is keeping track of the amount of money that is being put into the pot each month in premiums paid by health plan members or their employers. If too much is being paid out in expenses as compared with the amount being received in premiums, the pot will soon become empty and the health plan will go broke.
As previously mentioned, the monthly premiums paid by individuals or their employers go into a health plan’s big pot from which “covered” healthcare expenses are paid. But also from this pot are paid all the health plan’s administrative expenses including what may be big salaries and golden parachutes for CEO’s and other “healthcare executives” – individuals who may be paid to find technicalities of one sort or another in the health plan’s agreements so the health plan can deny or reduce payments, raise premiums, cancel insurance, or in one way or another minimize or exclude “bad risks” from the health plan. All such questionable business practices are done to enable the health plan to make a profit and remain in business.
Currently we are experiencing continual increases in healthcare costs that are unsustainable and which, if unchecked, will soon seriously threaten the future of the entire American economy. Healthcare costs must be controlled, but how? If a healthcare system made up of health plans is going to have a chance of meeting the needs of its health plan members and simultaneously be able to keep costs under control, something very critically important must first occur.
It turns out that a lot of illnesses and many injuries are actually preventable. Although health promotion and disease and injury prevention receive appropriately fashionable and socially acceptable and lip service, the fact is that most of the participants in what should be more appropriately called our “sickness and injury care system” actually have no significant financial incentive to spend time and energy in genuinely promoting health and helping to prevent disease and injury.
Much to the contrary. Other than the actual members of a health plan – patients and potential patients – and their employers and perhaps the employees of some health plans, most participants in our sickness and injury care system – because of the way they are paid – have an enormous (if unspoken) incentive to allow massive amounts of disease and injury – much of which is preventable – to continue to occur in America. For them, strictly from a financial point of view, the more disease and injury that occurs, the better. And if the disease or injury is serious and requires many expensive tests, multiple surgical procedures, and other complicated prolonged treatment, so much the better; just as long as those unfortunate individuals who happen to be diseased or injured are “covered” by “good insurance”, i.e. health plans that are reliable bill payers.
This is not to say that there are not some excellent and very dedicated and hardworking doctors and other health professionals – who are generally paid to care for illness and injury on a fee for service basis – who nevertheless attempt to essentially work themselves out of a job by very strongly encouraging health promotion and disease and injury prevention with their patients. Also, it should be recognized that some existing health plans – e.g. Kaiser and Group Health – combine insurance, doctors, and hospitals into a single entity in such a way that provides everyone – including all the health plan’s doctors – a real incentive to spend time and effort with patients on health promotion and disease and injury prevention as well as on early diagnosis and treatment. But unfortunately these two examples do not apply to the majority of the sickness and injury care system throughout America.
For the most part – because of the way they are compensated – most doctors and other professional providers, most acute care hospitals and long term care facilities, essentially all pharmaceutical manufactures and pharmacists, medical and surgical equipment manufacturers and personal injury and malpractice attorneys – among others – depend mightily on the massive amounts of disease and injury that occur in America; and these participants in our sickness and injury care system would be significantly negatively impacted if a lot of the preventable illnesses and injuries were actually prevented. This must be changed.
Unless the incentives and rules are changed to give as many participants as possible a real stake in prevention, early diagnosis and treatment, and maximizing health and minimizing disease and injury, healthcare costs in America will never be brought under control. Making appropriate and very significant changes in the incentives and the rules of the game is the real task and challenge of “healthcare reform”.
For example, should individuals receive a financial incentive to be healthy? It is well recognized that engaging in regular exercise, abstaining from tobacco, and eating moderately so as to maintain a reasonably normal body weight are all significant factors in helping to promote an individual’s health and wellness. These healthy behaviors can all be confirmed by simple tests in a doctor’s office. Why shouldn’t those individuals who practice these health promoting behaviors pay significantly less to their health plan than those who don’t?
To really reform healthcare we must figure out ways – through changes in incentives and the rules of the game – to actually prevent a lot of what is preventable, to maximize early diagnosis and treatment, and minimize disease and injury with all their associated costs. Most importantly we must find ways for essentially every participant to be part of our “healthcare system” and not just a part of our “sickness and injury care system”.
Significant changes in the rules of the game for our legal system – tort reform – is also critically important so that the gaming of the system now being done by personal injury and malpractice attorneys and their clients can be ended and so that the exorbitant costs to physicians and other professionals for malpractice insurance can be dramatically reduced.
Truly transforming our “sickness and injury care system” into a “healthcare system” by making significant changes in the incentives and the rules of the game would seem to be a formidable task and one that has probably never really been done before on a large scale anywhere in the world. But it is a worthy task and a critically important one for the future of America and its people.
One important step in this process is developing the capability of creating an electronic health record for every American citizen who wants one. We need a standardized framework that will allow every American citizen to have an individual electronic health record – a computerized medical record – that can be accessed by all the doctors who care for a particular individual, regardless of wherever on the planet the doctors or the patients happen to be. It would be like having your own personal online banking account that only you have the password to, but which you can share with the doctors who are caring for you, wherever you or they may be.
I strongly applaud those who are using their energy and expertise to upgrade our deplorable current paper medical records system and bring medical records in America into the 21st century. Developing a standardized framework for an electronic health record – for every citizen who wants one – created by your doctor with your assistance, which has proper security and safeguards is something that our national government can and should do as a part of healthcare reform.
If done well, electronic health records will be transformational in helping doctors efficiently and effectively care for patients – whenever and wherever they may be – and will save an enormous amount of time, effort, and money which is currently wasted on needless and frequently inaccurate duplication. Also, electronic health records will make it easier to evaluate each patient with regard to appropriate health promotion and disease and injury prevention. Like the telephone and the computer, someday we will all wonder how we ever got along without them.
But we need action, not just words. Now is the time for Americans and their leaders and doctors to step up to the plate and begin the process of transforming our “sickness and injury care system” into an “American Healthcare System” that is worthy of our great country.